How McCain's Top Economic Adviser Helped Create Subprime Meltdown

Who's to blame for the biggest financial catastrophe of our time? There are plenty of culprits, but one candidate for lead perp is former Sen. Phil Gramm. Eight years ago, as part of a decades-long anti-regulatory crusade, Gramm pulled a sly legislative maneuver that greased the way to the multibillion-dollar subprime meltdown. Yet has Gramm been banished from the corridors of power? Reviled as the villain who bankrupted Middle America? Hardly. Now a well-paid executive at a Swiss bank, Gramm cochairs Sen. John McCain's presidential campaign and advises the Republican candidate on economic matters. He's been mentioned as a possible Treasury secretary should McCain win. That's right: A guy who helped screw up the global financial system could end up in charge of US economic policy. Talk about a market failure.

Gramm's long been a handmaiden to Big Finance. In the 1990s, as chairman of the Senate banking committee, he routinely turned down Securities and Exchange Commission chairman Arthur Levitt's requests for more money to police Wall Street; during this period, the sec's workload shot up 80 percent, but its staff grew only 20 percent. Gramm also opposed an sec rule that would have prohibited accounting firms from getting too close to the companies they audited--at one point, according to Levitt's memoir, he warned the sec chairman that if the commission adopted the rule, its funding would be cut. And in 1999, Gramm pushed through a historic banking deregulation bill that decimated Depression-era firewalls between commercial banks, investment banks, insurance companies, and securities firms--setting off a wave of merger mania.

Read the whole story here.

Comments

[jsarets]

Hillary Clinton supporters will vote for McCain. After all, Bill Clinton signed the Commodity Futures Modernization Act into law. Many Democrats don't realize that the Clintons are in the bag for the Bilderberg Group and the New World Order. Yeah, the 90s were a prosperous time for Americans, but Bill Clinton set the stage for the loss of Constitutional sovereignty and the transition to global debt slavery that has accelerated under Bush.

To paraphrase a common anti-Obama attack line: What else don't we know about the Clintons?

[drzoon]

and don't forget... Bill Clinton was there! And... he SIGNED THE BILL

[Bluejay00234]

Yeah and this is the guy some Clinton supporters threaten to vote for out of spite huh? I guess when you can no longer afford 4 dollar a gallon gas, then are evicted from your home, and on the street corner with a sign "will work for food or gas" you can have the satisfaction of knowing you stuck it to Obama, yeah you got him real good!

[dadw5boys]

LADY'S and GENTLEMAN meet the MAN who brought you ENRON, WORLD COM AND THE CURRENT FINANCIAL CRISIS.

HE IS GOING TO BE MY ECONOMIC ADVISOR!!!!

VOTE FOR ME!!!!!!!!

[speakingtruth2power]

The right keeps yelling about "liberal media', "activist judges" and "over regulation"

as if any of that were true at all today. Now Wal*Mart can be a bank, Pharma can be

an insurance company and Big Oil can charge whatever the market can sustain!!!


The rule of Corporatism has run it's course, Allah willing and all rational Americans

are ready to return to a blend of well regulated capitalism and well proven socialism.

Liberal Populism will no longer sit back & be diminished & decapitated by fascism!!

[KBAR]

Well, Comrade, would you like to return to the days of regulated, mandated FIXED COMMISSIONS for every trade at ALL brokerage firms? Prior to 1973 that was exactly what was in place.

[SCLib]

HELL YES!!!!!

[speakingtruth2power]

Actually, I'd like to return to 1968 and have the Democratic Convention

surprise a watching world by choosing Shirley Chisholm who would

go on to defeat Nixon, insuring liberal populism's victory over fascism.

[ibsteve2u]

"Comrade"? lolll...that's corny...

[freshnotbitter]

McCain has a big problem with his Phil Gramm connection.

What does he do now? Fire Phil Gramm and say....what? "I have terrible judgment, let's try again"?

Not the kind of person we need as President. A President basically rules through the people he appoints and if Phil Gramm is the kind of person we can expect we will be in big trouble.

Comparing Phil Gramm to appointees like Rubin, Greenspan or other Clinton nominees I could name, is like comparing Sanjay to Caruso.

[nerakami]

You know what, I'm going to do a little rant here because, the media was relentless in its pursuit and ripping apart 24/7, the story on Rev Wright, a man who had 0 influence on the policies of the Obama campaign and here you have McFlip Flop's MAIN economic advisor who actually was the principal creator of the Bank's de-regulation policies, a man who was employed by the European Bank USB which was a principal player in the Housing crises we are all experiencing.... so I ask the question, where is the 24/7 coverage of this highly relevant and important story?

This is by ASSOCIATION - McCain is in league with a man who directly participated in creating our severe economic crises.

Notice to the media:
Rev. Wright may have said despicable things but it did not affect my life.
This man, Gramm has participated in a series of events that has lowered the equity in my home and is creating daily financial stress for me on so many levels. In case you don't get it, the Gramm story IS important to all Americans

[KBAR]

the European Bank USB which was a principal player in the Housing crises we are all experiencing....

You are wrong about UBS ( u s b is a computer connection ) UBS came late to mortgage backed securities. trading . Yes they were/are a player BUT not a PRINCIPAL player.

http://www.ubs.com/

BTW UBS came to the US with the purchase of Paine Webber.

[KBAR]

http://www.ubs.com/1/e/about/history.html

[KBAR]

No industry in the US is more regulated than the Financial Service Industry. The multiple layers of regulation and compliance are also costly to the consumer/investor. Every trade of every type has a compliance component

An alphabet soup of agency's ,Federal, State and even local .,are in place and growing. All under the mask of 'consumer protection'. We now see how well those really work.

Industries/ businesses have Business Development Departments BUT the Financial Services Industries companies have a Business RETARDATION Department.

[speakingtruth2power]

Do you believe that tripe or do you just get paid to repeat it?

Without effective propaganda, tricking the poor into voting

against their own self interests, democracy is your bane.

[KBAR]

Not only do I believe it I have lived it and can PROVE it!

Name a retail financial transaction and I'll show you the layers on mandatory compliance involved in that transaction. Stocks, Bonds, Insurance you name it!

[Piatt]

We're in deep, deep trouble if McCain is going to make up for his lack of economic expertise by relying on the Gramms.

[nibblybits]

Why focus just on Phil Gramm when he and his wife come as a classic conflict of interest team!!

Don't forget that Wendy Gramm served as chair of the Commodity Futures Trading Commission, where she loosened regulations to allow for Enron to trade so recklessly. Then after, she served on their board and earned $2 million. In fact, she served on several corporate boards who lobbied and contributed to her husband when he was in office and running for office. They were corrupt together! (You know what they say about couples who steal together....)

[JackLivigni]

We should learn from our history as citizens! Who is responsible for our ills as a society? We are! We have given our vote and our power to people who squander this trust to get in bed with special interests.

John McCain is positioning himself with a big player because that is where his heart is. He is not aiming to help the common American.

Just like he always says: "Barack Obama wants to raise taxes on Americans." Of whom does he speak? Of the top 2% of American citizens making the most money. His "America" is not the America of the common people, of the middle class, of those in poverty. McCain's America is Bush's America... it is that segment of society that wants to keep the common citizen in poverty, fear, subjugation. It is far easier to govern and control a citizenry that is in fear of losing their homes and livelihood!!

We have a choice to make, and if we have HALF A BRAIN we will park Senator McCain's booty on the side walk where it should be, along with all his special interest, modern day, democratic tyrrant friends.

[SaskiaStars]

The hits just keep on coming!!!

Buh-bye Grumpy McSame.

[southernsepia]

This is par for the republican course.

Their administrations are rife with corporate shills who see the national treasury as their piggy bank.

They get away with it due to an assist by the corporate media.

Not this time! McCain is toast!

Obama '08